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11 Must Reads for the CRE Industry Today (Jan. 3, 2023)

Washington Mayor Muriel Bowser called on the Biden administration to either end federal telework policies or turn over some government buildings to be converted into housing, reports ABC News. Twitter has been sued for non-payment of office rent by one of its landlords, according to Bloomberg. These are among today’s must reads from around the commercial real estate industry.

  1. DC mayor calls on Biden to end federal work-from-home or create affordable housing “On Monday, Washington Mayor Muriel Bowser called on President Joe Biden to either end work-from-home telework policies for federal government employees or turn over vacant government buildings in the nation's capital for housing in a new push to move 100,000 new residents into the city.” (ABC News)
  2. More Bosses Order Workers Back to the Office as Job Market Shifts “Companies including investment giant Vanguard Group, workplace technology company Paycom Software Inc. and others have sent directives to employees in recent weeks, urging workers to follow existing hybrid schedules or to come into the office on additional days in 2023, according to internal memos viewed by The Wall Street Journal and interviews with employees. In some cases, bosses have told those who fail to comply that they could face termination within weeks.” (The Wall Street Journal)
  3. Is New York City facing a ‘doom loop’ scenario? A discussion has started. “The answers, according to policy analysts, academics and others, have major implications on city revenues and budgets, employment, business bottom lines, public transportation funding, real estate and housing, as well as homelessness and public health policy. And how the government responds could determine if New York City enters what some academics describe as an ‘urban doom loop’ – a cycle of decline tied to tax revenue losses and spending cuts.” (Gothamist)
  4. Remote Work Is Poised to Devastate America’s Cities In order to survive, cities must let developers convert office buildings into housing. “A recent study from New York University’s Stern School of Business found that office values fell 45 percent in 2020, and are likely to remain 39 percent below pre-pandemic levels for the foreseeable future. If that projection proves true, it would wipe $453 billion in property values off American cities, thereby slashing a critical source of municipal revenues.” (New York Magazine)
  5. Twitter Sued for Nonpayment of Rent on San Francisco Office “The landlord, Columbia Reit - 650 California LLC, says it notified Twitter on Dec. 16 that it would be in default on its lease for the 30th floor of the Hartford Building in five days unless the rent was paid. The tenant failed to comply, Columbia Reit said in the complaint, filed Thursday in state court in San Francisco.” (Bloomberg)
  6. How CRE brokerages are responding to i-sales slowdown “Although the other publicly traded brokerages such as Cushman & Wakefield, Colliers and Newmark had not yet — as of this writing — informed investors of staff reductions, there’s little doubt among Wall Street analysts that such measures will be taken across the industry.” (The Real Deal)
  7. Albert Reichmann, Patriarch of a Real Estate Empire, Dies at 93 “Albert Reichmann, the billionaire patriarch of a real estate dynasty that built the World Financial Center, became the largest private owner of commercial property in New York City, and began the transformation of London’s derelict Docklands into the gleaming Canary Wharf cluster of skyscrapers, died on Dec. 17 in Toronto, the family’s hometown. He was 93.” (The New York Times)
  8. Will Proptech Continue to Consolidate in 2023? “Coming out of a massively disrupted macroeconomic landscape in 2022, major questions abound about the value potential of proptech startups. That includes whether tech newbies will continue to be targets for consolidation through mergers and acquisitions or takeover by traditional real estate firms — or just fold under the pressure.” (Commercial Observer)
  9. Donald Trump’s Taxes Show Wide Use of Real-Estate Losses “While audited financials released by the Democratic-led House Committee on Oversight and Reform in 2021 show operating profits in some fiscal years, after the payments for the lease along with depreciation and amortization of the mortgage were deducted, the hotel recorded a net loss each year of Mr. Trump’s presidency. Similar losses were then recorded in the business tax returns for one of Mr. Trump’s business entities, DJT Holdings.” (The Wall Street Journal)
  10. Landlords snuff out Kingston rent appeal “The landlords suing Kingston, its rent board and HCR point out that the state law that made rent stabilization possible in the upstate city didn’t even pass until June 2019. They argue further that imposing rent regulation retroactively violates case law.” (The Real Deal)
  11. NYC REIT to give up REIT status, sets reverse stock split as CRE recovery 'remains challenged' “New York City REIT Inc. (NYC) said Friday that it will give up its status as a real estate investment trust and become a taxable C corporation, as it plan to expand the scope of its assets and businesses. The owner of commercial real estate in New York City said the pace of recovery of the office segment ‘remains challenged’ in the post-COVID pandemic world, as leasing and occupancy trends have slowed, which has led political, community and business leaders to propose repositioning plans for NYC office assets.” (Dow Jones)
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